Real Estate  

Columbia Threadneedle gates property fund

Columbia Threadneedle gates property fund

Columbia Threadneedle Investments has suspended dealing in its open-ended property fund, as it battles rising institutional redemption requests on another property fund.

Investors have been unable to buy or sell units in the £453mn CT UK Paif or its feeder fund since midday on Monday (October 10), due to liquidity issues.

In a statement, the asset manager said the amount of cash in the fund has reduced to a level where the fund could not meet future redemption requests until assets had been sold.

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CT said the fund had continued selling assets in the past year to meet “ongoing liquidity requirements”, but had experienced a recent increase in redemption requests. 

The fund has outperformed the IA’s UK direct property sector in the year to October 11, returning 11.3 per cent compared to the sector return of 5.53 per cent.

Some £517mn has been withdrawn from UK property funds since January, according to the Investment Association. Redemptions increased rapidly towards the end of summer, with £9mn withdrawn in June, £36mn in July and £199mn in August.

The gating comes after a number of institutional-facing property funds were forced to alter their dealing structures after being overwhelmed with redemption requests.

Columbia Threadneedle has moved its TPEN Property fund from daily to monthly dealing as it grapples with a rise in redemption requests, saying it is aiming to move the fund back to daily dealing as soon as possible.

BlackRock’s UK Property Fund, which at £3.5bn is one of the largest in the sector, experienced significant redemption requests from pension funds and has deferred these.

Finally, Schroders’ Capital UK Real Estate fund has also suffered, deferring the majority of the amount it was due to pay out in September for requests received in June.

At the time, sector experts said the gatings will not impact most retail investors.

“Is there any sense that this is going to impact large numbers of private investors? I don’t think so at this stage, simply because these funds have not been popular with retail investors for years now,” said Jason Hollands, managing director of Bestinvest.

Independent consultant John Forbes said: “I do not think there is a universal trend…Investors in most institutional real estate funds accept that they do not have much redemption liquidity.”